Transcripts For CNBC Squawk On The Street 20150319

That weve seen in currencies pretty much since the financial crisis. Road map this morning, apple debuts as a dow component, set to begin trading as part of the enduring index. Starbucks announcing new venture in china, testing delivery in new york and Ceo Howard Schultz on mad money defending race together. Target set to boost its minimum wages. But first up, the dow and the s p set to open lower, one day after the big fedinduced rally and a drop in the dollar. Intraday currencies some of the biggest percentage moves weve seen since the crisis. Right. These are legendary. You know stuff of when literally seeing the speed of light on trillions of dollars, trillions of currencies are trading, speed of light, very hard to get your hand on. The take this morning is that is a lesson for sort of ripple effects that are going to happen in relatively il liquidity assets as the fed normalizes. Thats why i like Stanley Fischer the vice chairman knows what happened in 97 98 in asia. Janet yellen, one of the smartest people in the room understands this stuff. Im impressed with these people. They are just masters. Theyre not show people. Maybe thats what people want out of yl, aellen, song and dance. Honor the remarkable work. When kernen asked liesman if yellen did a highfive and he said, she probably did, you agree. Shooyou think she nailed it. I think she nailed. Some times we have people born and raised in the country and oh their way up. Your mom says how are they doopg doing, mom im not going to be number one do your best. Do your best. Janet yellen is the smartest person in the class, thats okay. We need a smart person. What does it say, all of the dovish talk, the lowering of Interest Rate trajectories and inflation . February was a weak month. Well hear from williamssonoma today. Amazing company. And this port slowdown directly impacted their numbers. We can say, well thats one off. But wait a second oil, how come oils not going higher . Thats one off. Housing starts they were weak. Thats one off. No, enough. February was weaker. Its true i can point to lennar, say thats a good number. I can point to retailers having a good time. Its easy to say not yet, not yet, not when the worlds trying to figure out what to do in terms of restart growth. Give the rest of the world a couple of months and we may not be in this jam. Dont fire until you see the whites of inflations eyes. Or s. O. S. Band take your time, do it right. How come the usa today, ive got to tell you, they zeitgeist. Yes. Larry cramer by the way, involved with race together usa today. Interesting. Larrys an old friend of mine, doing a lot of right things. Apple trading as a dow component, worlds most valuable company replacing at t. Apple ranks fifth in dow weighting despite 748 billion market cap because of the price weighted index. A lot of news. Talk about what its going to do for the dow. Theres a new reuters poll showing 40 of adult iphone users are interested in buying the watch. I think its about 110 when were done. What i keep hearing, whats being written for this thing, this is a receptacle people in Health Writing for this thing that will make it so you could actually wear a watch on one arm and have that device and not regard it as a watch. Thats the way i get to keep the breitling, i think. Try to keep it i see. The apple watch over here. One style in fashion, one is health. Yes. I think its reuters poll 39 of adults say well take a look at it. The journal has a piece on apple tv and our own parent comcast, arguing, back to the Consent Decree when they bought nbcu, they might be pushed by the ftc to take part in some way at least similar to how other competitors are taking part. We work for comcast. When i read that i said its very unusual for apple to say, were going to do this but we dont have nbc. Its much more apple style to say, were going to do this and you know our way or the highway, get on board. Were going to find ways to convince you i mean theyre not the godfather. Theyre just saying listen rules say this is okay. Its like when i saw jpmorgan and visa and mastercard in the audience for apple pay, and i was thinking who is going to stop them . Its visa mastercard morgan. And theyre in the front row. Im like wait a second how did that happen . Keep your friends close and your yes. I think so. Finally, youve been preaching for a long time that apple should not be traded it should be owned. Yeah. Does becoming a component make that transition easier . You know what . I think theres enough people i dont think if you go to College Campus now, dow 30. But what it does is theres always people saying i think its like i feel comfortable. Makes it even more comfortable. I think what they should be comfortable with is earnings per share, theyve got a road map. Disney and apple are two companies that seem like every single quarter, when you think they dont have anything they come out with something, yeah look at that. This wasnt in anybodys numbers, this apple tv suddenly im thinking that might be the way to go. Two companies that have had mutual fascination with each other. Jobs, the new books being written, talked about, how disappointed he was in disneys culture after disneys death and the last thing he wanted to happen to apple was the same thing. Walter isaacsons great book bob iger seems to be the only executive that steve jobs didnt make fun of as soon as he left the room. He actually respected him. Lets tackle starbucks, announcing joint venture to produce and sell readytodrink beverages in china, Testing Delivery Service in seattle and new york city. Lots of buzz surrounding controversial race together campaign to spur conversations about race. Last night during jims inter view on mad money, schultz insisted its not a ploy to boost business. Take a listen. Theres no part of this on any level thats about marketing or pr or trying to get more business. I dont think its going to hurt business. We have not seen that in the last 24 hours. This is going to have a long tail to. I think people trust the brand, trust intentions of the company, trust our people and i have great faith that our people will do the right thing and not put any customer in a situation where theyre being handed something they dont want to carry. You always say, not here to make friends, youre here to make money. You like this . He stressed it was voluntary, i say yes. I do like it. In the interview, you watch the interview, you might think im trying to get whether its good for shareholders customers, its obviously good for the country, i think. That was not my purpose to say is this good for the country, i think the discussion is good. I didnt think it was controversial when it came out, we discussed. But present it when i go to starbucks, do i think about this . Im looking at people and thinking, like my kids have taught me dont think economically some person may not be doing as well as you economically, dont think race. Were past that. That was 1960 with my parents. But you know what . Thats its individual. What howard is saying is its individual. I certainly done think it it was done for business definitely not. If you listened to the close circuit meet it was blow away. People want to talk about this and he has great people working for him. Anybody who gives them a hard time, its a shame. Kareem abduljabbar writing, im in awe, awe of the companys trying it shocked that they think it will work. Wow. I met kareem. Hes amazing. He wont remember that he met me. I met him but thats kind of a good summary. I dont know if it will work but its amazing. You have to go back to what those people said to him at these different meetings and realize how passionate howard is. Remember, he did this gay rights, did for gun control. Hes Touching Every third rail there is Mellody Hobson talks about this is the third rail. Hes got the discussion going. I said is the job done . Were all discussing it. This morning the times quotes gwen ifill, if you start to engage me in a race conversation before ive had my Morning Coffee it will not end well. Thats what i said. I i said listen this is my third place, its in the ridiculous world that i am in my starbucks is like my safety zone. But then he pointed out that some of the workers feel thats the safety zone to discuss. We all have our own personal spirits. He kept saying its voluntary. You dont have to up end your safety zone but its a good thing to talk and i agree with him. The problem is that my morning cup of coffee is really of course the split, the sixth split and waited longer than usual. 3 of last 5 splits had a five handle when they made the move. Now well above that. By the way, Delivery System i think terrific. Lets say there had been no discussion, you know backing up, theres a lot of good things coming out of starbucks including Delivery System more technology, that drive the stock higher. Some people might say, the same stores going to go down is Dunkin Donuts going higher. So many things in motion if you start a discussion this is it. You know i think theres so many people going to starbucks. Hes got a captive group. Theyre not going to be turned off by this thats my bet but i had to push him on that. I remember on mad money, im thinking, if i dont ask him about earnings per share, what am i a Mad Scientist . This is mad money. The guidance was in line if you adjust for the split. Last year he had the meeting, and the stock got hurt two year ago a meeting, the stock got hurt. It didnt happen this time. All over the morning shows, absolutely. All anyones talking about other than ncaa. Target planning a wage hike for workers. Walmart set that tone hear what that ceo had to say about rivals following its lead. The president of lvmhs watch division to cut prices due to surge in the swiss franc. Another look at the premarket after the dow climbs that amazing 227 points yesterday, claims in line as well. More squawk on the street from post 9 in a moment. Baby i know why you after walmart and tjx, another retailer jumping on the wage hike band wagon. Reports say target plans to boost pay of all of otherwise workers to at least 9 next month. The Discount Chain agreeing to pay 10 million in a proposed settlement of the classaction lawsuit related to the 2013 data breach. We remember when walmart made this move more workers in the u. S. Walmarts got over 1 million. Target has under 400,000, but anecdotally, Wage Inflation is starting to move. I agree. I know my Charitable Trust owns the stock and i think a lot of people might have believed when they didnt announce when walmart did they wouldnt. I dont now how people could be surprised. I think the stocks a buy. All of these factored in. That day, tjx had a great quarter and announced it and the stock got hammered. Walmart, got quarter, got hammered. Target has to spend a day or two in the woodshed. This is the day of the future. People arent paid that much and it hits bottom line. Remember what jim cinny gal taught us the more you pay them the more they stay. More profitable. Lets not be too hasty. Thor toeor toe tortoise won that race. We did ask Doug Mcmillon how he would feel, would rivals follow suit. Changes were making include structural changes in the stores, wage increases, training programs, and this company, as you know has always been a people business. Its a people Business Today and it will be tomorrow. And so our associates, their pride in the company, the ownership that they take those things are vital to running a good Retail Business and today were investing in them and we want them to know how important they. Expect your competitors to match . Stocks like target and kroger are down some believe because investors expect they will have to match. I think the competitive marketplace works and theyll do whats best for their business. What might be more interesting today this port issue. You mentioned williamssonoma, thats going to save ten cents. Thats a sobering Conference Call. By the way an amazing company, 50 is ecommerce and they had such decline in inventory. People go to the stock realize theyre out of stock. Listen to the Conference Call. This company is wellrun. And it was just a couple of long shore people that did wreck their quarter. That will be finished this quarter. Its not going to be done this quarters going to be impacted. When that smoke clears you want to buy the stock. The stock will not remain down long. Its on fire other than urban outfitters, the best quarter. You just cant see it because of the port situation. They are hitting on all cylinders. Remarkable. Youve been saying for a while im blown away how good that company is. Probably the Fastest Growing individual division of any retailer in the country. Why do they have a port problem . Theres such demand. What pay company. They are so far ahead of everybody else when it comes to ecommerce, its amazing. Sticking with the retail theme quickly, the journal with a piece on sears, suppliers are getting worried. Are you telling me within the same paragraph, sears carl. I mean honestly. They both do sell dry goods, fair enough . Really. Lets talk about lets talk about harvard and kentucky . Right . Harvard can go all the way and finish that first game. May finish harvard. No, you yeah you get my drift. Tough piece on sears today. We know comps through january were down four plus. Reit spinoff, storys well told so far. It is. Daytons going to beat them. On that article was devastateing. Well get cramers mad dash, count down to the opening bell. A look at the premarket as we bounce back from fed day, a couple of fed days. More squawk on the street straight ahead. Hello. I am here to offer sophisticated investing strategies. My technology can help you choose the right portfolio. Monitor it. And automatically rebalance it. All without charging advisory fees, account service fees or commissions. That may be hard to compute. But im a computer. So trust me. It computes. Say hello at intelligent. Schwab. Com can it make a dentist appointment when my teeth are ready . Can it track my crews performance, and protect their heads . Can it tell the Flight Attendant to please not wake me this time . At cognizant, we see opportunities for every company. To meet the new digital demands of their customers. Can it process my Insurance Claim . Like, right now . Can it download a track while im sampling it . Can my keys find me . With the power of digital, analytics and automation now every little thing can provide even greater value. Ok, so can it tell the doctor how long you have to wear this thing . The answer is yes, it can. So, the question your customers are really asking is can your business deliver . 8 30 until the bell. Cramers mad dash this morning. Another downgrade for ebay. This is controversial, hold to sell piper. Theyre saying everyones coming into the paypal space. Now the other day hearing good things about the core ebay. But Everyone Wants to be in the stock because of paypal. Piper points out the Facebook Initiative my Charitable Trust owns it could hurt them. Google, google pay. Everybodys gunning for ebay. I felt the call may have impact. We just had Facebook Messenger this week. Snapchats in charge venmo. They argue google could still buy paypal. I felt they should. The issue is that i think the Facebook News my friend Robert Patton from suntrust if facebook gets this right, it could be game set, match. You know what . I havent seen facebook get a lot of things wrong. So i mean facebook is the first one that maybe theyre the international bank. If i were jpmorgan, id be worried about facebook. Theyll say, well what is cramer talking about . My kids are on facebook 24 7 not on jpmorgan 24 7. Let me post my pictures on jpmorgan. No, im not going to do that. Im going to tell jpmorgan about my trip not going to happen. Hints of housing recovery at lennar. Great way to put. Lennars so much better than everybody else. No lennar keeps Getting Better and better. Stewart miller is a great operator. All during the period where Housing Starts are weak what has he done . I think theyre just great at what they do. 50 cents beats 45. Orders up 18. Wow. Deliverys up 19. Making money on each house. Theyve done so much to make it be as if the Housing Stock should not trade together. They should be best of breed and its this one. I like toll, too, for urban initiatives. We talked earlier in the week. I like that miller said starts should rebound, start to rebound. What a relief that would be. Yes. Again, i think that if you sit down with stu would tell you its tightness with the credit level with banks and thats totally true. You need a high fico score to get that loan. Money has not loosened the way you think it would. Thats the big fact. That and the fact were not having as many kids. Housing is one thing we cannot afford to lose. John stumpf taught me housing punches above its weight. It looks like 10 above the economy, it is multiple times that. When you sit down with john stumpf, he makes more sense than anyone i deal with in banking. Opening bell in over five minutes. Dont go too far. Female announcer right now at sleep train get up to 48 months interestfree financing on tempurpedic. Save hundreds on beautyrest. Or choose 300 in free gifts with stearns foster. The triple choice sale ends soon at sleep train. So whats going on today . News alert message email calendar update most of us admit to being overwhelmed by information at work. Thats why ibm created verse. It uses powerful analytics to uncover hidden patterns in your email, calendars and social feeds. It continuously learns how you work. And helps you prioritize the people and projects you need to focus on. Theres a new way to work and its made with ibm. Youre watching cnbcs squawk on the street, live from the Financial Capital of the world on this thursday. Opening bell in just about 2 30. A lot going on today. Apple, of course joining the down an economic summit over the eu. Currency markets rebounding from a crazy 24 hours. And oil going back and testing. We had Boone Pickens on. Last night a fellow on from magellan the largest pipeline for refined product. Demand he says, lives. A good level for demand. This is the level that rich kinder said to me. Boon did update his forecast. He does see 80 to 90 within 12 to 18 months. I mean one of the things i love about boone the rig count would be cut in half. I think its 60 70. I dont think it gets back to where it is. David cody from honey well thinks its 50 60. Go against these guys youre going against people that have done more work than anybody. I come out with 60 as where we could be 18 months from today. Transtransocean another charge, dispose of four more rigs total to 16 theyve announced. What do you say . Stocks down 61 in 12 months. Not done. Only industry thats worse than that is coal. Look at clf, i mean iron and coal, btu, peabody, iron cliff, this and they are all just in secular decline. Offshore oil, its too expensive. So many carl, ive looked at log in the section 18 months all billed for 120 oil. It takes forever to build them. Way too many. Its awful. Amazing piece from the journal looking at the fracking equipment for exxon, chevron, royal dutch, gone. Gone from russia. Maybe that whole fracking experience. At the same time one of the great shales in colorado magellans building a pipe 850 million, two quick partners. Theres plenty of oil. By the way, plenty of storage space. May seen there isnt but were importing 7 Million Barrels a day. We were so full up why arent we importing nothing . Be careful. Good point. People talk about 70 capacity and freak out. Be careful. Thats guys taking down storage and selling futures which is a decent trade [ bell ringing ] theres the opening bell. Big board, its two harbors Investment Corp and at the nasdaq alabamabased National Commerce corporation, celebrating its ipo today. Of course, we will keep our eye on tesla today, jim. The meeting begins at noon where we get the software upgrade. We got a note from baird thats saying you should buy the stock, you knucklehead, what are you doing not buying the stock . Its the greatest stock ever. By the way, it also makes great cars. Its a cold stock, people get behind it. He could say were not going to ship anything its better than ever. Be careful. The guys a powerful proponent of his own situation. Cohen sides with new jersey the governor chris christie, signing a law reversing the stance previously. Very interesting because you know i mean the dealers are everyone talks about how powerful dealers are, they make a lot of money. Chris christie this is hes taking a National Perspective here. Hmmm. National perspective. Lets take a look at apple. Maybe we can look at the dow 30 which will include apple for the very first time. Look, apple is doing so many things right, but up huge yesterday. Its still inexpensive. Pick up the paper, something new every day penaltys doing and thats what happened to a great company. I was thinking of walmart when you did that great interview, one of the reason walmarts a tough stock to own, nothing happens to walmart. The really good companies, always on the tape with terrific news doing great things. Ones that are going higher. Look, lets use starbucks. You may like theyre in the headlines and part of the conversation. Maybe the morning cup conversation its a winner not a loser, they didnt do it for that i tell you than good stocks have great news flow and bad ones whats the story there . The first component, best performing component in the dow, apple, with nike. Unh, health maintenance, have great momentum. Nike reports tomorrow. Be very careful there numbers from retailer that sell nikes. Visa, Charlie Scharf doing well. Pulte lennar housing names. Rates stay low. Stew says things get better. Its going to get warmer they tell me. Spring tomorrow expecting three inches of snow in the northeast. Endless, unhappy. People they call in on mad money, im here in santa monica, i want to say, you know how i feel . But i hold back because im kind of gandhilike when it comes to callers. That guy, you dont think of gandhi having game . Hes the man. Tmobile close to the highest level since august. News yesterday making a big push into the enterprise where at t and verizon hold the court. Talk about news flow. John legere, he takes it to everybody, right. The guys got a gorilla strategy, and hes its hes so big he shouldnt be the gorilla but hes listen im the upstart with billions behind me. Hes made that group investable. Do we have sound from john legere . Fan fastic. Announcing this. Tack a listen. Two years almost to the date of taking the uncarrier revolution to the consumer business were bringing it to the business markets. The pricing is the pricing, its very simple the datas included and can be pulled to purchase by line. Giving them the tools for the dotcom capabilities on go daddy or microsoft and taking care of their families. We know what hes done with the consumer. Is this is this over the skis . Are you worried . Hes rebel with a cause and the cause to make it so everyone knows hes the cheapest. You cant own at t, verizons tough to own, sprint is tough to own because this man is determined to be a rebel breaking price structure. Hes your Worst Nightmare if youre in that industry. Because he pops up everywhere. Hes on twitter saying we will bury you. Like khrushchev takes his shoe off. The guys amazing. Retweeter, too. He is. Probably watching now. 24 7 everywhere. Even spencer from zillow had to take a backseat yesterday. Spencers retweeting him. A big retweet circle. The modern model for a ceo, certain type. A piece today critical of kent in the wall street journal saying he canceled a meeting with the google. Tmobiles not canceling meetings with social media people because hes a dominant social media force. You might be asked about rite aid, 3 gain on no real news that we can see. People feel its a takeover situation. Ive been recommending earnings situation and the fact they made a brilliant acquisition of a pharmacy benefit manager which what is turned around cvs. Rite aid, i begged them to come on. My pictures in my rite aid now because i recommended. Your local rite aid. My picture. Greatest guy, tom and jerry, guys behind the counter, fantastic. This is a better run company than it used to be. You shouldnt own it on takeover talk. The pharmacy benefit manager strategys brilliant. I think walgreen which got rid of its pbm may go back to it because rite aids going to get a lot of conversions of customers. Youll see analysts come out positive about this deal. Certainly a move getting attention. We mentioned williamssonoma in the last half hour. 3 downside but you think it will be shortlived . Yeah. These people sell it because they dont read the Conference Call. Conference call well orchestrated and they just say, look guys its not going to happen this quarter either. They use very damaging very what i regard super cautionary language in the Conference Call and thats scaring people. Dont be scared. Let it settle. This quarters not going to be that good because of the ports but this is the company of the future. Everyone its the envy of the whole industry. I thought of you this morning with yahoo news leaving china closing remaining office in the mainland laying off a couple hundred workers. You said the reason you prefer yahoo to baba they are not as levered to china. No. What yahoos doing is looking systemically at the businesses and saying were not going to do anything stupid anymore. I continue to that Marissa Mayers doing a fabulous job, first thing the steward of capital. She did brilliant stuff with alibaba. Its clearly worth something. Watch tumbler. Acquisition stewing for a while. She can do anything and people say, well you know what . Tim armstrong should take over. John legere should take over yahoo . Would you mine if Marissa Mayer takes over yahoo . Its not a bad thing. Still owns finance. Still owns that vertical tumbler is a terrific vertical. Im not a pr person for her but im a pr person for a stock valued at zero exalibaba. My favorite graph, increase in Corporate Cash a third is yahoo having made their investment more liquid. Huge chunk is yahoo great piece of data. Dows down 70 points. Let get to bob pisani. Good morning. After a fantastic day yesterday, historic day you could argue, everythings reversed again. Back to where we were two days ago. Lets look at key sectors and key commodities. S p down the dollar is stronger against the euro. And oil is down. What else is new . So not surprisingly the weak link today, down the dow, down in the nas sack and s p, oil stocks. Your usual names, dan bury rigs chesapeake its ground hog day here every day with these names. This is the way we start our day, i think its the law. Down 3 in energy. Are we at the start of a tightening cycle . We couldnt get any conclusion. Seem to be in the shadowy period leading up to a tightening. So mkm had a good note out. In the six months prior to tightening cycles three prior ones, had them in 94, 99, 2004 s p tends to gain in six months,age average 6 . Big gainers, financials up 12 . Makes sense. Interest rates rising. That helps banks, no surprise there. Once you get into the tightening period, everybody knows, stocks tend to have a tougher time and the three months after that tightening period, put that up, see the s ps timypically down. Telecoms outperformed. Underperforming are industrials and discretionary. All of this makes a lot of sense. The problem right now its not really clear exactly what period were in right now. And thats messing people up. You look at fundamentals the fed have told us what the fundamentals are, its very clear. The fed sees lower growth lower unemployment, low inflation, and a slower increase in Interest Rates. Thats what theyve told us. To me this would seem to favor cyclical stocks. It would seem to be telling you, buy Retail Stocks for example, in the xrt, retail etf held up well. And also home builders, Something Like that would work here. Fundamentals favor certain sectors the prospect of imminent rate hike is confusing everyone. Thats why its hard to pick what the markets going to be doing in the next couple of months. Cant argue where we are now. Just look at the Global Market situation right now. Chinas at a seven year high. Germany at historic high. Lets not quibble about a point. Russell at historic high. S p 0. 8 away from historic high. Global rally going on in the stock market. See what happens in the next couple months. As far lennar Stewart Miller produced another great number. Ors up 18 , better than expected. Earnings better than expected. Gross margin 23. 4 that is a great number. You start getting over 21 22 on Gross Margins in any of the companies, im the son of a home builder, those are good numbers. Hard to do that with a company as big lennar. I love Stewart Miller goes to the heart of what everybodys wondering, his quote, early signals from the spring selling season indicate the housing markets improving. Disappointing, Single Family starts and permit numbers should rebound shortly. Thank you, exactly what we wanted to have some clarity on what you think is going on in that. I think thats the right answer overall. Right now the dow down 76 points. Bob pisani. Keep your eye on the tenyear back down to 1. 93ing rick. Interesting ride yesterday in the treasuries as well as for enexchange obviously. Bobs market s ps what turnarounds close to 30 points. Whats the aftermath. Two day of fives, notice wow what a drop. Basically a quick 20basis point drop. Today up four basis point. Yesterday about curves steepening. Today its back to normal curves starting to flatten. Its ball mean reversion to the trades that were popular before the statement. Look at the twoday of the 30 on the other side of the curve. Yesterday its drop was half of that of fives, but ten basis points, and theyre unchanged today which goes back into the flattening mode. Lets go back to the tens. Yeartodate chart may be best. We know that we stopped at right place if youre a technician 2. 15 to 221 area is important. Whats most important referenced by carl hovering in the low 1. 90s. These are sixweek low yield closes were hovering at. Lets look at difference between tens and bunds. This is the big deal yesterday. Foreign exchange was big, Interest Rates were big on the Interest Rate differential. But whats fascinating is the distance between our yields and tens changed very little little yesterday with all of that volatility. Lets look at the tenyear bund. Yes, your eyes are right, hovering at 18 basis points another fresh alltime yield low close. And if we look to the marks at epicenter of volatility on Foreign Exchange its mean reversion, two day of the euro versus the dollar everybody sweating yesterday. Oh my goodness we went from 1. 06 to 1. 10. Here we are giving a lot of it back because the dynamics are in place. It isnt about the words in the statement, it isnt about the words about any Government Official or politician. Its what action may be behind the words and many believe that very little really has changed. And its evident in these markets, the same said for the dollar yen. Dollar lost a lot of ground in that trade yesterday. But as you see in twoday chart, giving a lot of it back. Rick santelli in chicago. Despite yesterdays oil rally, brent back below 55. Lets get to jackie deangelis. Good morning. Thats right, we are seeing bearish act here today. Were down 1. 46 on wti but hanging over 45. The latest comments out from opec are one of the thens that people are talking about. No change in stance here saying production will remain constant and opec has to do that to keep its market share. Here we go. Onus again on the u. S. To cut production and really do something about the price decline here. But remember these rigs coming offline, a lot of analysts telling me these are older rigs theyre not producing so much anyway. So it is going to take some time for our production to slow down. And also opec in its latest monthly report saying it expects the u. S. Production not to slow until late 2015. Analysts i speak to were looking at the second half kind of globally. If its later in the year november, december that could be quite significant. Meantime, we did see a little rally yesterday on the dollar. This was after the dovish fed cooled the dollar down a little. But you have dollar index over 99 this morning and thats why were seeing the negative action. Carl back to you. Thanks so much. When we come back alibaba, after that lockup expiration, what has been a rough 2015 for the stock, well talk with one of the earliest investors in the chinese ecommerce giant. Dow down 92 points as the crazy week continues. Back in a moment. 40 of the streetlights in detroit, at one point, did not work. You had some blocks and you had major thoroughfares and corridors that were just totally pitch black. Those things had to change. We wanted to restore our lighting system in the city. You can have the greatest dreams in the world, but unless you can finance those dreams, it doesnt happen. At the time that the bankruptcy filing was done, the Public Lighting Authority had a hard time of finding a bank. Citi did not run away from the table like some other bankers did. Citi had the strength to help us go to the credit markets and raise the money. Its a brighter day in detroit. People can see better when theyre out doing their tasks, young people are moving back in town the kids are feeling safer while they walk to school. And folks are making investments and the community is moving forward. 40 of the lights were out, but theyre not out for long. Theyre coming back. A live shot here of trenton, new jersey uber drivers protesting what lawmakers about to hold a hearing on legislation that would require uber to provide additional Insurance Coverage on top of what it already provides in the state. Take a quick listen. Thank you so muff. If you have not rejgistered yet, register at table. Keep uber in jersey. Such a law would drive uber out of jersey and the new require minutes are greater than what traditional taxi and limo competitors face. This is a popular service. People talk about the 40 billion valuation. Valuations are what they are. You are what your record is. If they can raise 40 billion, its going to come public. You believe the litigations built into the model . I do. I think they have a better mousetrap. As you said one of the great unmet needs in history. One of the great unmet needs well put. Well keep our eye on than jerseys in the news a lot, between that and tesla. Yeah. I think that i have been jersey if they get finances in the news we can go buy Municipal Bonds in jersey thats the news im waiting for. Well get stop trading with jim in a moment as we get almost close to 100point decline in the dow. Back in a moment. My name is bret hembree. I am an electric crew foreman out of the cupertino service center. I was born and raised in the cupertino area. Its a fantastic area to work. The new technology that we are installing out in the field is important for the customers because system reliability i believe is number one. Pg e is always trying to plan for the future and we are always trying to build something stronger and bigger and more reliable. I love living here and i love the community i serve. Nobody wants to be without power. I dont want my family to be without power. Its much more personal to me for that reason. I dont think theres any place i really would rather be. Now with the xfinity tv go app, you can watch live tv anytime. Its never been easier with so Many Networks all in one place. Get live tv whenever you want. The xfinity tv go app. Now with live tv on the go. Enjoy over wifi or on Verizon Wireless 4g lte. Plus enjoy special savings when you purchase any new Verizon Wireless smartphone or tablet from comcast. Visit comcast. Com wireless to learn more. Team for cramer and stop trading. Insanity in the market like regeneron, you can shoot yourself with that for the anticholesterol every other week. Biogenitic, big alzheimers news come out on friday. Every day the stock goes up. Today another analyst, Credit Suisse raising price target. Its going up again tomorrow. Whether it be receptos fold they have positive regulatory approval, celgene breaking out and biogen goes up. People making jokes about yellen covering her biotech sword yesterday. I did make that joke. Not respectful joke. Shes doing a good job. Watch starbucks, goes public jim, in june of 1992 and its never been higher than at this moment. Howard shut onchultz on the show last night, dont be cynical. They are doing so many initiatives and taking it to the rest of retail. They are a technology company, they are wellrun doing great in china and thats what the, from my point of view i feel like im parochial saying it but theyre running a great company. Michaels this morning, a slight hit. Well talk to the ceo, chuck ruben later today, but cutting outlook. Retails interesting. Vince, i love the shirts dont like the stock. Retails all over the map. Its tough in your yellen to say retail is strong you cant. The curve is just spread all over the place. Some are 5. 6, 1. 2, 7. 9. Go read williamssonoma, that growth in omni channel, they are the envy if youre nordstroms, one of the brothers youre saying please go buy them which theyll never do buy them to learn. Sears down more than a percent now. Sears. Yeah, they have nothing. Jim whats on mad tonight. Weve got the company that i think is one of the inspirations why starbucks is doing so well today. Weve have postmates. Amazing story. Dan leever whats known as a rollout platform. Martin franklin the guy behind it. We want to watch this startup that Howard Schultz has gotten involved in. That guys more bandwidth than anybody ive ever seen. He has more things going on in his head. India, thats the tea is going to be great in china when he go theres. Why no regulatory problems in china . He says i want to meet the parents. Meet the parents. The guy, i know yesterday i was tough on them about the deal when i go to my starbucks, how i feel. You to have be sure the stuff works and the whole pieceworks. I think that the proof is in the stock price. Thats an interesting experiment to see how social mission like this translates into it is amazing, we dont talk race. Its obvious from ferguson we can benefit from talk and other people herbalife mylike my kids say, dad, what is with you . Youre some 60yearold guy, talk about race . Its difficult. See you tonight. Mad dash,. Well get breaking news on philly fed, currency effects tossing tag heuer to cut prices. Well talk with the head of the watch division in a moment. Theres nothing more romantic than a spontaneous moment. So why pause to take a pill . And why stop what youre doing to find a bathroom . With cialis for daily use, you dont have to plan around either. Its the only daily tablet approved to treat erectile dysfunction so you can be Ready Anytime the moment is right. 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The answer is yes, it can. So, the question your customers are really asking is can your business deliver . Good thursday morning. Welcome back to squawk on the street. Carl quintanilla with sar roo icen and simon hobbs. Its a morning of reversals. The mark give back a lot of what it got from the fedintroduced rally yesterday. The nasdaq resilient, dollar getting ground that it lost back. And oil of course back to 43. 16. The road plan for the hour. Wild moves in currencies after yesterdays fed decision. The dollar though bouncing back from its sharp fall. Well take you through all of the moves and tell you whats next. Speaking of currencies tag heuer says its lowering its prices because of moves in the and franc. The ceo will join us live in a first on cnbc interview. Hearing taking place now in new jersey that could push uber out of the state. A live report in a few minutes. Rick santelli philly fed breaking as we speak. Rick . Absolutely. March philly fed, current read is five, five, looking for closer to 7. 8. Last number unrevised 5. 27 this done give us any significant new information on direction but only thing i need to mention is the cycle high for this number was back in november at 40 and change. So five is not bad but weve been much higher. Backwards in time. February read on lei up. 2 as expected. Last look. 2. No revision there. That fits in as well. Just to put some context, most recent best month over month in july 1. We hadnt have a negative read on lei since january of last year. Back to you. Not a lot of impact there on that Economic Data point. The action is in the currency market. A stunning 24 hours. The dollar is in rebound mode today, especially against the euro 106. Pa 52 after a fierce plunge yesterday. The worst day for the dollar in years. The Federal Reserves surprising stance leaning away from higher Interest Rates, triggering the mother of all short covering. In other words, so many people piled into the strong dollar trade with bullish bets near a record high the snapback we saw was so intense. Where does this all leave us . Today back to a strong dollar. Dollar bulls are getting a nice opportunity, and have over the last 24 hours to scoop up more dollars at better levels. Vut from the view from the Research Notes the big gains, giant moves for the dollar may be behind us talking about 30 move for the year. The fed made it clear its worried about it but the dollars on a oneway ticket higher especially if the u. S. Economy can shake off the frigid february weather, the temporary port dispute, and starts healing that leads the fed towards high Interest Rates. Eurodollar parity in the cards with all of you with summer trips planned to europe from the United States. It might not be as fast and furious as it has been. Could be a slower assent of the u. S. Dollar. In the words of bill gross yesterday, u. S. Has officially entered the currency war. Lets bring in ethan harris, our very own steve liesman. Ethan, schoolchildren are taught that great democracies have independent Central Banks so they do whats right for the long term. Do you believe janet yellen is doing whats right for the long term or doing a greenspan . No shes doing the right thing. Weve had weak data in the u. S. The fed is finally acknowledging how soft the Inflation Numbers are. So shes throwing sand in the gears of this idea that the feds rushing to the exit. Inflation is a long long way off and theres no rush for the fed to be hiking Interest Rates. So i like what i heard from the fed yesterday. It seemed much more realistic assessment of the economy. But ethan, if you are going to keep rates near zero and keep them lower for longer which is what she said yesterday, dont you have to believe the dollar isnt going to weaken oil and gas prices arent going to rebound . Are we in that poor state . I think whats important here is that the fed correctly recognizes that the big risk to the u. S. Is not inflation, its about getting a full recovery in the economy. Weve had a disappointing fiveyear recovery weve seen what can happen in a region like europe if you let your economy languish too long. Weve got to get the economy really fully back on its feet then you normalize Interest Rates. But we dont want to sit in this semi recovery forever. It leaves us vulnerable to the next shock. Growth is the priority right here for the fed. Steve . You know, simon, i think you have to ask yourself what changed between, say, december and today. And theres that big downward shift by the fed. I was in the process of doing that. What i found was that when the fed met in december and pegged Interest Rates and the outlook for the fed funds rate inflation was running on the positive level on a headline. Around 1. 3, 1. 4. Its negative on a yearoveryear basis. Euro was 1. 24. Oil was 55 a barrel now its 43. What ethan said is right but how far out do you take it . For a period the u. S. Economy is digesting, i guess to mix a metaphor, downdraft of inflation coming from overseas and coming internally, domestically from a siri of issues. I would not bet all of my house on the idea that the fed is not going to raise rates, say, through the summer here. I think theres still some chance depending upon the speed with which we digest. Some of this stuff, as you know is oneoff. Youll digest the dollar if we stay at 1. 06 for a while that doesnt happen. Digest oil prices. But thats precisely the point im trying to make here. Ethan, theyre supposed to be setting policy for where we are 18 months 5 years down the line. We are looking at daily currency moves. Should it be this way . There were not talking about daily currency moves. The dollars had a relentless move higher. Slicing a half percent off of growth anden flation. This is the fourth biggest dollar move in modern history. A big move and the fed has to Pay Attention to it. Yes, absolutely have to be hiking Interest Rates over the next several years but theres no rush. Makes sense for them to slow down momentum in the Foreign Exchange market. Let me just can i point something out, ethan, yesterday was the biggest move on the euro the second biggest move since its inception. You know, you can argue that free markets are doing what free markets are supposed to do. It is janet yellen breaking away from that and preventing those free markets around the world from equal lib premium, which is what we believe in dont we . No the Central Banks have an obligation to provide some guidance to the economy. They dont just step back and accept the markets mandate. In this case the fed accepted a very big move in the dollar but some point you reach a limit wir the damage to the economys serious. Letting the dollar move by 20 is quite a concession to free markets. To say were not going to let it go 25 is the central bank doing its job. I mean bottom line steve, data depent fed, shes made it clear, she might not know what that mean when the first Interest Rate is she sounded indecisive on that on purpose. But wall street economists steve, need to come up with a forecast now. What is the betting . Is it june september, next year . Hearing a lot of september. A lot of people in june. Cnbc fed forecast before the meeting came back from september to august but thats a wash in itself. I think the idea is you have to get up in the morning and when its 8 30 cpi day march 24th, turn on your tv sara as i know you do and ethan does and watch that Labor Department report. That is absolutely decisive. The philly fed, that just came out, prices paid mine this in three. Prices received minus six. Downgraft in inflation working its way in the economy. Theres a forecast out there its going to wash out but its going to be some time. Thank you. Ethan and steve, thank you both. Hearings under way in new jersey that could force uber out of the state. Kate rogers live in trenton with more on that. Kate . Reporter thats right. Tensions are high here at State Capitol today. As you can see, all here behind me supporters of uber rallying against a bill being heard inside by new jersey state legislators that uber says could drive it out of the state. A few things at stake here. Number one, mandated state background checks for drivers, a special seal on licenses that says they drive for the company and vehicle inspections by the new jersey Motor Vehicle commission. Uber says if this passes they will leave new jersey. This bills aim to drive us out of the state. Its to prevent having to compete and if it passes we will have to leave new jersey. Reporter now, uber supporters tell us theyre happy driving for the platform they have freedom and flexibility. Some speculating new jerseys trying to profit off of the cash that uberer has made and that cash means a lot to these drivers. 57 years old, no source of income living on my wifes income raising a household with two grandkids and then uber came along and in the past year i earned 75,000. You tell me what its meant to me. Reporter now uber has organized a rally here behind us, theyre organized. A p. A. System theyve got these tshirts. Check this out, sent out an email blast to uber customers, sent to a colleague at cnbc who is an uber passenger, asking theyll to come down to State Capitol and support uber in rallying against this bill. Down the street the new jersey taxi establishment has their own protest and rally going on as well. Well bring you much more during squawk alley next hour. The latest on a string of legal challenges for uber. Kate rogers in new jersey. When we come back, concerns among big business regarding the strong dollar are rising. Many companies are urging washington to intervene against currency manipulation. Senator Chuck Grassley with his take on that. What should washingtons role be in currencies . Squawk on the street will be right back. Its effects on society really came about because, not because i was selfish and wanted one for myself, which i did. Its because i had, had a passion. My whole life i wanted to teach myself to build computers. I wanted to build these things for free. I just wanted to do it for the world and you know when you want something, thats what you do the best. My name is tony sartorio. Im a lineman for pg e out of the Concord Service center. I have lived here pretty much my whole life. I have been married for twelve years. I have 3 kids. I love living here and i love working in my hometown. At pg e we are always working to upgrade reliability to meet the demands of the customers. Im there to do the safest job possible not only for them, but everybody, myself included that lives in the community. Im very proud to do the work that i do and say that i am a lineman for pg e because its my hometown. Its a rewarding feeling. We noted that export growth has weakened probably the strong dollar is one reason for that. On the other hand the strength of the dollar also in part reflects the strength of the u. S. Economy. The strength of the dollar is also one factor that is as i noted, holding down import prices and at least on a transitory basis at this point pushing inflation down. Fed chairman janet yellen unusually talking about the u. S. Dollar. Some u. S. Companies are now voicing concerns about the strong dollar, calling for washington to intervene against socalled currency manipulation in which countries like china hold down the value of their currencies helping to keep exfors to the u. S. Cheaper while also making goods to the u. S. More expensive. Joining us Chuck Grassley member of the budget and finance xhaty. Thanks for taking the time. Glad to be with you. Do you think theres a role for you, for congress to get involved in socalled currency manipulation right now . The answer is yes, as we consider trade legislation and trade agreements and what our government ought to be doing during those negotiations not necessarily interfere with negotiations but to make sure that currency manipulation if its done for political purposes by politicians as opposed to Central Banks, the answer is yes. But whats going on right now, in other words, many countries weakening their currencies, is a result of Central Bank Action but Central Bank Action that the u. S. Has done and has been doing ever since the financial crisis on a lot bigger scale than what were seeing now. I dont believe that you should have political leaders of the United States interfering with the fedex september for an audit of the fed but not the pollicy monetary policy. When it comes to congress having power over interstate and foreign chersommerce and we have negotiations going on and china manipulating their currency to subsidize their exports, i think it ought to be an issue during negotiations on trade agreements. And i think congress has a role in dictating to our negotiators that currency ought to be something thats negotiated or could be considered a nonfair trade barrier if actions going toing taken after theres an agreement. Just to be clear, talking about an actual tariff a tax being put on chinese goods to the u. S. . Are you talking about other countries as well that we should be punishing for this. Im going to leave that to negotiators. But it seems to me there ought to be action taken when theres a specific action taken by an individual country, china, most often, japan to some extent, that specifically subsidizes their exports. Yes, that ought to be an issue in negotiation. What action should be taken after they do that after theres an agreement, would be left to the normal responses that a government can take under the rules of law of international trade. Senator, isnt there a case here for keeping your powder dry with the chinese . Yes, theyve devalued to keep a peg to the dollar but kept their currency rising as the u. S. Dollar has risen. The fear is that they massively devalue from here which would cause chaos in asia a massive round of further competitive devaluations. Is it bettor stay silent and wield the big stick in private than to go public now . I think for ten years, maybe longer than that but under both republicans and democrats, theres been too much too caution in dealing with china on the issue of currency and its been out of i dont know whether its out of respect or out of fear of what they can do but i tell Chinese People when they come to my Office Officials or ambassadors, or when people of those interests testify before a committee, that quite frankly, their reaction always is that were interfering in their Domestic Affairs. I would encourage china to have dialogue with us on our Domestic Affairs that they might disagree with. We have a perfect right to question their judgment. But also we have law that says that our Treasury Department our president , has to make a decision when theres currency manipulation. Weve never wanted to charge them with manipulation. And i think our caution has been to the disadvantage of the American Consumer to the disadvantage of our producers in this country. What would that be a bigger disadvance disadvantage we have a trade war. It gets out of hand you see policies like taxing that kill growth and is not good for any business here and abroad. I have to agree with what you just said but until we challenge the chinese, is there a trade war or isnt there going to be a war, maybe you have to do it cautiously im saying under both republican and demonstrations, we have been too cautious which china. Understood. I know a lot of folks are looking at japan as well including some in the auto industry. I have a feeling well hear more about this issue. For now well leave it there. Thank you for joining us. Glad to be with you. Chanel hiking prices this week because of wild currency moves. Now tag heuers being affected. The brand having to freeze or cut prices around the globe. The ceo of tag heuer, head of the watch division at lvmh will join us live in a first on cnbc interview after the break. If youre running a business legalzoom has your back. 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Liberty mutual insurance. Help join a continent with nearly 3 million rugged square miles with a single broadband connection. When emerson takes up the challenge its never been done before simply becomes consider it solved. Emerson. Swiss watch makers trying to fend off apple on one side facing a rising swiss franc on the other. Tag heuer announcing it will cut prices by 13 in some markets. The Company Announcing a smartwatch, in partership with google and intel. Talking first on cnbc the head of lvmhs watch division and ceo of tag heuer, jeanclaude biver. Good morning. A lot of people saying this marks the swiss watch industry end of ignoring the threat of smartwatchs. Is that what this is . No no the swiss watch industry has entered connected watch very recently. The last example is our entry into the connected watch together with intel and google. The swiss watch industry is quite strong and innovative, of course. We were not in the Communication Technology. We know how to produce movements. We know how to produce cases, crowns but Communication Technology the microchips and software is not our specialty. And because of that we believe that we should be associated with the two strongest giants in the technology. One for the hardware which is intel, intel inside a Tag Heuer Watch and for the other one, android wear from google we signed and communicated a few minutes ago this incredible strong enormous partnership when Silicon Valley meets switzerland. In this will be huge. You were quoted about i guess section months ago, asked about the apple watch. You said it has no sex appeal its too feminine looks like it was designed by a student in their first trimeftster. Are you convinced you can do this better . I dont know. Were going to try. But you know i said that first sight, i think it was wrong for my side. It was wrong because thats not true. It was an overreaction. I think the apple watch is perfectly designed and it look like an apple watch. That is what an achievement. You design a watch that look like an apple watch. Its not easy. Imagine they would have done a round watch, it would not have look like an apple watch. All in all, a brilliant design for apple, even for my own tastes i prefer more sexy. But everybodys different. And we at tag heuer, google and intel, we are going to try to design a watch with a lot of emotion, with a lot of tension, with a lot of design and harmony. And we will bring into the connected watch all of our experience 155 years in the watch business. We want our connected watch to have the sex appeal of a tag heuer and that for sure, were going to succeed. Mr. Biver isnt it dangerous for lux yiury good makers to be cutting their prices havent you sought for years and years to have Pricing Power to show products will rise in value and Good Investments over time. This is dangerous what you and chanel are doing, isnt it . It could appear like dangerous but it brings a lot of credibility. When a currency goes down by 20 , you cannot sell your watches at the same price, which means youre going to do 20 more margin. And that on the customer the customer wants to buy the watches at the right price. If the currency the euro has dropped by 20 , how can we sell our watches at the same price in the u. S. Dollar . We must reduce prices adapt to the currency if not all americans will fly to france or elsewhere to buy their watches and thats not what we want. We want american customer to be treated equally to any others and we want them to buy the watches at the same price of the europeans. Why should europeans buy watches cheaper than the americans . Its a view echoed by a lot of other Swiss Companies now. Do you see what do you see ahead for the swiss watch industry given all of this hype over smartwatchs, not just from apple but others and some of the economic headwinds youre dealing with with the swiss franc and the weakness in the economy thats causing . So i think with the swiss francs we would know how to cope. Remember when i started 40 year ago one dollars and four swiss francs. Today one dollar is less than one. We are still selling watches in america. So the strong swiss franc is something we have known since we are born. And it switzerland had the strong currency since world war ii that is something we know how to cope. The political situation in syria, uncertainties in russia, this we cannot really handle but nevertheless, considering all of this and considering also a certain slowdown which is now seems to be over in china, we believe, at least in this there is a consensus among the different brands that we might have another record year. Not with growth of 5 or 10 . Eventually a gross of 1 , 2 3 . If you grow 2 on the record year means you do another record year. Each time you do a record year you cannot complain. Mr. Biver, el marmach was asked about the coming threat of smartwatchs. He thought the apple watch would succeed, in terms of the swiss industry anything in the range of 500 to 1000 francs was in danger and said i expect an ice age coming toward us. Why is he wrong, if he is . I didnt say hes wrong. At that price segment, hes probably right. I can share this opinion myself between 500 and 1,000, was the average price of the connected watches, are they from apple, sony, lg samsung, all around 500, 700 800. At that price level, for sure there is a threat. At the higher price level at 3,000 watch, a watch that retails for 3,000, what is it . Its a piece of eternity in a box because 3,000 to 5,000 watch is eternal. Your children will have be able to wear it the children of the children will wear. Its a piece of eternity and that part of the swiss watch industry will not suffer because connected watch is just a complimentary watch, its like you can own a smart car and you can have a 60 s, theyre not competing, theyre additional different. But on the lower segment, hes right. I see a threat that is for sure. But i can see the swiss are reacting 12 brands bringing connected watches to this fair. The react is quick and soon. And tag heuer is going to present in october or november the connected watch with our friends from google swin tell. It shows you how dynamic, reactive this industry is. Cant wait to see it. The first android luxury smartwatch. Jeanclaude biver, thank you for your time. Lets get to the nymex. Breaking news on natural gasp. Good morning, sara. The department of energy out with its weekly inventory report on nat gas. We got a withdrawal for last week of 45 billion cubic feet in line with expectations. Nat gas lower on this morning, to 8 on last week we saw a draw down of 180 cubic feet. Its much less than we saw last year 69 billion cubic feet. Was much colder at this point in march last year than this year though talking about snow for tomorrow. What traders are talking about now for the nat gas trade in between period where you dont need heat you dont necessarily need airconditioning, they do expect these prices to potentially go lower from here. Some people talking about 2. 25 an interesting trade to watch for the short term. If its a hot summer we could see prices rush back up again. Back to you. Thank you very much. Straight ahead on the program, king dollar fighting back one day after its largest fall in over a year and a half. The dollar shaking off the short interruption from janet yellen. Squawk on the street will be right back. In my world, wall isnt a street. Return on investment isnt the only return im looking forward to. For some every dollar is earned with sweat, sacrifice, courage. Which is why usaa is honored to help our members with everything from investing for retirement to saving for college. Our commitment to current and former military members and their families is without equal. Start investing with as little as fifty dollars. E financial noise financial noise financial noise financial noise now with the xfinity tv go app, you can watch live tv anytime. Its never been easier with so Many Networks all in one place. Get live tv whenever you want. The xfinity tv go app. Now with live tv on the go. Enjoy over wifi or on Verizon Wireless 4g lte. Plus enjoy special savings when you purchase any new Verizon Wireless smartphone or tablet from comcast. Visit comcast. Com wireless to learn more. Good morning. Im sue herera heres your cnbc news update. There is word tunisian forces arrested four people in connection with the deadly assault. 24 people mostly tourists were killed and 50 people injured. No formal link to a particular terrorist group has been established but one of the two gunmen was known to intelligence. Costa cruises operated by carnival is canceling all upcoming stops in tunisia. Police say the real estate heir had a latex mask 42,000 in cash when arrested over the weekend. Charged with murder in the killing of his friend 15 years ago and suspected but not charged in his first wifes disappearance in 1982. Target proposing to pay 10 million to settle a classaction lawsuit related to 2013s massive data breach. Individuals could be reimbursed up to 10,000. Amazon expanding onehour Delivery Service to some areas of baltimore and miami. The service prime now had only been available in new york city. Youre up to date. Thats your cnbc news update at this hour. Back to you guys. Janet yellen and the rest of the fomc managed to pummel the dollar yesterday. Now the dollar is fighting back. The euro back down to 1. 06 give or take. Lets bring in for more analysis on the currency marks, cnbc contributor, todd gordon founder of trading analysis. Com. Good to have you back on the show. Nice to be with you. Why is the Foreign Exchange market all but ig forignoring what happened yesterday. I have to apologize im on a cell phone remote. Its a healthy pullback to a much more dovish fed than we would have expected. The euro has given back some gains, dollar rallied, but its a 2 3 retracement, giving 2 3 back which is healthy in the upturn. I think the fed is coming to the realization that the divergent monetary policies cant continue. I think the dollar does need to take a bit of a pause. Were seeing thefx markets gold crude off the lows and bonds rally. These are inner market signals that suggest the dollar needs to take a bit of a pause here. Okay. Isnt this best just a stay of execution on the fed on raising Interest Rates . In other words, the dollars weaker today. Doesnt it make up that ground in the future when they do fire the trigger, or because we know from the dots rates will stay low for longer has janet yellen fundamentally affected the level at which the dollar will rest . I do believe they are continuing. I think september, at a minimum, begin to raise rates. Bonds are up at the highs. Back to bonds rallying with equities based on lower Interest Rates. When the fed does pull the trigger, i dont know. I guess september for now. But theres too much going on for the fed to do this. Look at what other Central Banks, look what norway did, this is not a central bank that we track but the norwegian crone, major energy play as crude and natural gas and brent destroyed the norwegian currency has been crushed. The norwegian crone rallied sharply as the dollar sold auch losing the commodity play right now and i just dont see this happening. I believe gold to set in a low, crude to set in a low. We need to take a pause here. Todd clearly janet yellen and other wall street banks have left the door open for an Interest Rate increase as soon as this year. But in all of the years that youve been doing this following the Foreign Exchange market, the Central Banks, have you ever seen a period where the two biggest most powerful Central Banks in the world are using their big power and their ammunition and going in completely opposite directions . Are we underestimating the force that this is having not just on the currency market but other markets as well this complete divergence from two Central Banks . Thats it i just dont know how they can begin to raise rates when europes on the brink, china slowing down bank of japan would kill for 2 inflation. I think the love the trend. Love the uptrend. Look at dollar yen sara youre a big fx follower. You know when 30year bonds push higher, it drives the yield low somewhere deinsenty vies to take yen out of japan and invest overseas. We cant get to 1. 21. This divergence happened, this dollar this lack of policy on the upside of the dollar began days before the meeting. I warn made clients guys were losing the dollar here and thats not a good sign. Im going to use it to take opportunities to be long gold. Im going to be long i covered crude shorts today with clients. Interesting. Dollar is dollars consolidating here. When we raise rates, fine. But as you know currencies are trading three, six, nine months ahead of time. We dont know where it is right now. Good to talk to you, todd. Interesting that you covered your oil shorts. Well come back to that. In the meantime todd gordon. European leaders meeting in brussels for a summit where greeces financial situation is dominating the agenda. Can there be any agreement . Cnbcs Julia Chatterly is there live. Whats the latest . Reporter thanks sara. The greek Prime Minister and Germanys Merkel set to meet on the sidelines of the eu summit after the broader talks have wrapped. The hope they could thrash out some kind of deal in the short term to address greeces funding crisis. Angela merkel arrived here poured freezing cold water on the prospect of that saying there will be no deal tonight. Its up to the finance ministers to thrash that out there was a lot of caution here and weve seen that in the runup to meeting in the greek asset prices. Look at tenyear yields set to close at the highest level since july 2013. Sentiment not helped coming into the meeting by the moves from the greeks in last 24 hours announcing a whole raft of measures to address a humanitarian crisis in their country, fine you can agree theyre needed but theyre not allowed to take decisions right now alone. The bottom line here is both leaders hands are tied merkels hands tied by the shifting sentiment weve seen in germany. Right now 59 of the population will be to see greece leave the euro zones. Tsipras bound to the promises he made but bound to the deal he signed a month ago, if there were no reforms, there would be no cash. Merkel emphasizing that point coming into this meeting tonight. The question is can tsipras convince her otherwise . Julia chatterly in brussels thank you so much. The ceo of michaels joins squawk alley live to weigh in on the crafting economy and how theyre affected by the like of etsy and pinterest. Tomorrow, Richard Fisher retires today and join us live tomorrow. Squawk on the street is coming right back. Say youre a finance guy. A farmer. A researcher. You used to depend on experience. The internet. Your gut. Today you can use ibm watson analytics. It can make sense of all kinds of data. Uncover hidden correlations and new opportunities. And give recommendations with more confidence on who will buy. What to make. Where to plant. Which helps you make smarter decisions. Theres a new way to work and its made with ibm. Sunday dinners at my house. Its a full day for me, and i love it. But when i started having back pain my sister had to come help. I dont like asking for help. I took tylenol but i had to take six pills to get through the day. So my daughter brought over some aleve. Its just two pills, all day and now, im back aleve. Two pills. All day strong, all day long. And now introducing aleve pm for a better am. Opportunities arent always obvious. Sometimes they just drop in. Cme group can help you navigate risks and capture opportunities. We enable you to reach Global Markets and drive forward with broader possibilities. Cme group how the world advances. Fed surprising the markets. Where do bonds go from here . Are stocks the new safe haven trade. Go to trading nation and collect it 2 00 eastern time. More squawk on the street after this. Evtops. So open an account with schwab. And when a market move affects, say a Cloud Computing stock youre holding, we can help you decide what to do. With tools that help you see how market activity is affecting your positions. So when the time comes to decide whether to scale in or scale out. You can make your move wherever you are. And start working on your next big idea. 7 out of 10 sectors are lower but not health care making gains. Dom chu has more at hq. Its a relatively calm day for the markets overall after the fed fireworks yesterday. Health care trying to help a small way, up. 2 at this point. The health care spyder exchangetraded fund mirroring that same move. Among the upside standouts shares of cerner abbvie celgene, up around 1. 5 to 3 . Very interesting moves in the Health Care Sector overall but specifically the large cap biotechs. Thank you very much. Speaking of fed fireworks over to chicago, cme group. Rick santelli with the Santelli Exchange this morning. Hi, rick. Good morning. I like to welcome my special guest, first time guest david ader. Thanks for taking the time. Thank you for having me. Listen, i want to talk about greece. But not as in the country ee. I want to talk about grease the kind that makes gears move smoothly. Lets rise above the issues have a macro conversation. The amount of debt out there keeps growing but yet the amount thats tradeable keeps shrinking. The type of clt ral high credit like bunds, shots, treasuries, is hunkered down whether Central Banks balance sheets, insurance companies, are we going to have a lot more kind of october 15th crash type markets because of this issue in your opinion . I think that was a dress rehearsal for whats coming. The dealer community, the cushion against selloffs or the need for liquidity in the market is not there. And you know with the taper tantrum a dress rehearsal for it. Marks are changing. Were getting volatility in there. Theres a lot more disruptions. David, when i look at a trading floor, i see some of the biggest historic pits in the history of the world like eurodollar options, not the currency, the forward rate. What i see is is that it getting small somewhere smaller even though many traders are trying to hang on because when normalization occurs theres going to be a lot of trading going on. Is the fed being short sighted in allowing the market to run so thinly in terms of lubrication . They are going to need these people to distribute at some point in the future, are they not . Certainly are the point of going to these floors and fewer people out there, i mean my industry, the treasury market has been devastated, whether its a lack of capital, people have been forced out, maybe going to hedge funds or algorithm funds, theres not a lot of people out there to support. The move to electronic trading on the part of the Investor Community also has been a significant change. Its not been a problem. The feds been buying sufficient Central Banks have been buying stuff but within they stop buying and start going into a different phase of the market, its going to have an impact there. I used to work at a firm that on paper its a primary dealer. Its not a primary dealer anymore. And there are a lot of those out there. Oh yeah primary dealer list has shrunk dramatically. Yesterday the big news was all of the volatility in foren exchange. Listen, theres should be no question. The reason we have volatility is most likely because Central Banks are kind of masking real signals so the only signal you have is interpretation of whats in brains of people like draghi and yellen. Last ten seconds, do you think ultimately if we had to point fingers thats where the fingers should point . Yeah if you point fingers, thats where the fingers should point. Central banks have been running the show and also as a result of it, you know taking the markets down in terms of liquidity. Its been six years where were affected by. They dont, i dont think, recognize or appreciate that the taper tantrumtantrum, as an example, is going to be a show were going to see a lot more of that and then what the question is is volatility a sign of something going on in the economy. We will have to stop it there, david. Because were out of time. The volatility issue we will hit more on in the future. Were definitely going to have you back. Thanks for taking the time. Sara back to you. Thank you very much rick santelli. Up next whatever brief rally oil got after the fed is long gone. West texas and brent both down sharply again today. 3 move lower for west texas intermediate. What does it mean for big oil . S p energy group is the worst performer in a down market. More on that when we come back. In new york state, were reinventing how we do business so businesses can reinvent the world. From pharmaceuticals to 3d prototyping, biotech to clean energy. 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Joining us now is an Energy Analyst at raymond james. I guess, pavel, that rally that came out of the Federal Reserve meeting, and it was a pretty strong one and the price of oil was short lived and the price is headed back lower . Well it was an artificial rally because the oil was actually down 2 yesterday after the inventories number in the morning and that reversed course completely after the fed statement and actually ended up 4 on the day so pure currency trade, you know, its very important to emphasis currency does not set oil prices in the long run. Day to day, yes, there is an inverse correlation between the dollar and oil futures, but in the long run that is absolutely not what sets pricing. I guess the question for you, and i know the wall street journal did call you out a few months ago and other analysts in your sector who cover Energy Companies and havent been able to nail the call on the price of oil, is how do you tell clients and people what to do with the Big Oil Companies when its hard to see a bottom for the price of oil . Right. Well in the short run, you know, as your prior guest talked about, you know, the dollar is going to be moving and including Central Bank Announcements is going to be moving a lot of whats happening in the commodity market right. So its not a supply demand question right now on a daytoday basis. Its these external factors like currency volatility. What we can say is by q4 of this Year Oil Prices have to move higher to support a more sustainable level of investment in 2016. Current year budgets are in youve heard me say this before are in austerity on steroids across the oil and gas sector. Next year, if this kind of austerity continues, Global Oil Supply will almost certainly be in decline. To prevent that from happening, oil needs to move higher by q4. So pavel, it if you were there, in a room with janet yellen and she said im going to delay Interest Rate rises because i think that oil is deflationary and will stay deflationary and wont bounce back and cause me a problem what would you say to her . Well the fed is not going to base its decisions on commodity prices. Commodity prices are very small part of, you know the u. S. Economy and, indeed, the global economy, but that being said if the fed were to delay raising rates as was, you know, the indication yesterday, that would actually be supportive for Higher Oil Prices in the short run. Again, over years, it is supply and demand that drive oil prices, not what happens in the fed or anything else. All right. Pavel, we got to leave it there. Thanks for weighing in, of course, on these wild austerity on steroids on the energy sector. Pavel from raymond james. High time we venture down the alley. Lets link in with jon fortt and see whats up for the next hour. Were going to be safe in the alley, though. Apple is in the dow but how much influence is it going to have . We will take a look coming up. John legere t mobile ceo talk to him about the carriers latest moves and the impact on that company and industry and michaels ceo will join us not just at out in the craft business cant forget about michaels and more. Coming up on squawk alley. Theres a difference when you trade with fidelity. One you wont find anywhere else. Onesecond trade execution. Guaranteed. Did you see it . In one second, he made a trade we looked for the best price and the trade went through. Do the other guys guarantee that . Didnt think so. Open an account and find more of the expertise you need to be a better investor. Can it make a dentist appointment when my teeth are ready . Can it tell the doctor how long you have to wear this thing . Can it tell the Flight Attendant to please not wake me this time . The answer is yes, it can. So, the question your customers are really asking is can your business deliver . Good thursday morning. 8 00 a. M. At starbucks headquarters in seattle, washington 11 00 a. M. On wall street, squawk alley is live. Welcome to squawk alley for your thursday. Joining us henry blodget, founder,